Concept Ventures Raises $60 Million to Plug Pre-Seed Funding Gap

• Concept Ventures, formerly known as RLC Ventures, has raised a fresh £50 million ($60 million) fund.
• The fund aims to back over 60 pre-seed startups in Europe over the next four years.
• It is dedicating its fund to the pre-seed stage as more multi-stage funds flow into the UK.

A British venture capital firm backed by the UK government has raised a fresh £50 million ($60 million) pre-seed fund, the largest dedicated fund of its kind in the UK.

Concept Ventures, which has backed over 100 pre-seed founders since its launch as RLC Ventures in 2018, raised the new oversubscribed fund to target founders that it says are reshaping how people “work, play and learn.”

It received a £30 million ($36 million) commitment from the Enterprise Capital Funds program of the British Business Bank, a state-owned economic development bank founded by the UK government in 2014 to boost the supply of credit to small and medium-sized businesses.

Reece Chowdhry, founder and general partner at Concept Ventures, believes the fund will help fill a “major gap in the pre-seed ecosystem” – an early stage of a startup’s lifecycle in which founders often turn to family, friends, and other personal networks to raise capital.

Concept believes that as bigger funds look to back earlier-stage startups – a phenomenon that has accelerated as later-stage startups have suffered from a recent economic downturn – many founders can be exposed to so-called “signaling risk”.

This occurs when a brand-name VC firm, such as those that landed in Europe from the US, leads or makes an investment in a startup’s seed round, but decides not to invest in its next funding round, raising concerns among observers as to why the investor pulled out.

“We are completely focused on this critical stage of a company’s life cycle and are able to provide the funding, expertise and network they need to succeed,” he said. “We’re deeply committed to setting our portfolio up for future success.”

The firm, which has previously backed startups in the Web3 and gaming sectors, will sign checks of up to £600,000 ($721,000), with the aim of backing over 60 startups within the next four years. 

The firm’s other limited partners come from diverse backgrounds, with 80% of the  LP base made up of ethnic minorities, many of which are current or previous founders it has backed. 

Chowdhry told Insider that while current market conditions have “brought out cautiousness” from VCs investing in Series A rounds and beyond, the “sentiment has not trickled down to early-stage investors”. 

“With valuations now cooling in a sharp reversal to the market dynamics we saw last year, we now see a clear opportunity to back strong companies at more favorable entry valuations,” he said. “Given the depth of our pre-speed specialism, investors had conviction in our ability to navigate the market to capitalize on the opportunity.”

Startups previously backed by Concept include corporate gifting firm Reachdesk and Your Juno, a platform designed to offer financial education to women and non-binary users.

Check out the 11-slide LP deck Concept used below: